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A chain letter is a message that attempts to convince the recipient to make a number of copies and pass them on to a certain number of recipients. The "chain" is an exponentially growing pyramid that cannot be sustained indefinitely.
An advance-fee scam is a form of fraud and is one of the most common types of confidence tricks. The scam typically involves promising the victim a significant share of a large sum of money, in return for a small up-front payment, which the fraudster claims will be used to obtain the large sum. If a victim makes the payment, the fraudster either invents a series of further fees for the victim to pay or simply disappears.
A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are coming from legitimate business activity, and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
Email fraud is intentional deception for either personal gain or to damage another individual by means of email. Almost as soon as email became widely used, it began to be used as a means to defraud people. Email fraud can take the form of a "con game", or scam. Confidence tricks tend to exploit the inherent greed and dishonesty of its victims. The prospect of a 'bargain' or 'something for nothing' can be very tempting. Email fraud, as with other 'bunco schemes,' usually targets naive individuals who put their confidence in schemes to get rich quickly. These include 'too good to be true' investments or offers to sell popular items at 'impossibly low' prices. Many people have lost their life savings due to fraud.
A high-yield investment program (HYIP) is a type of Ponzi scheme, an investment scam that promises unsustainably high return on investment by paying previous investors with the money invested by new investors.
A matrix scheme is a business model involving the exchange of money for a certain product with a side bonus of being added to a waiting list for a product of greater value than the amount given. Matrix schemes are also sometimes considered similar to Ponzi or pyramid schemes. They have been called "unsustainable" by the United Kingdom's Office of Fair Trading. A matrix scheme is also an example of an 'exploding queue' in queueing theory.
Nu Skin Enterprises, Inc. is an American multilevel marketing company that develops and sells personal care products and dietary supplements. Under the Nu Skin and Pharmanex brands, the company sells its products in 54 markets through a network of approximately 1.2 million independent distributors.
BurnLounge, Inc. was a multi-level marketing online music store founded in 2004 and based in New York City. By 2006, the company reported 30,000 members using the site to sell music through its network. In 2007, the company was sued by the Federal Trade Commission for being an illegal pyramid scheme. The company lost the suit in 2012, and lost appeal in June 2014. In June 2015, the FTC began returning $1.9 million to people who had lost money in the scheme. The company is dormant pending additional appeals.
Employment fraud is the attempt to defraud people seeking employment by giving them false hope of better employment, offering better working hours, more respectable tasks, future opportunities, or higher wages. They often advertise at the same locations as genuine employers and may ask for money in exchange for the opportunity to apply for a job.
Telemarketing fraud is fraudulent selling conducted over the telephone. The term is also used for telephone fraud not involving selling.
Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salaried workforce selling the company's products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.
Make Money Fast is a title of an electronically forwarded chain letter created in 1988 which became so infamous that the term is often used to describe all sorts of chain letters forwarded over the Internet, by e-mail spam, or in Usenet newsgroups. In anti-spammer slang, the name is often abbreviated "MMF".
The airplane game, also known as the Plane Game, was a style of pyramid scheme in the 1980s first active in North America and then in Western Europe.
A susu or sou-sou or osusu or asue is a form of rotating savings and credit association, a type of informal savings club arrangement between a small group of people who take turns by "throwing hand", as the partners call it. The name is used in Africa and the Caribbean. The basic principle is that each member of the group makes a standard contribution to a common fund once per some time period. Then each period the total contributions are disbursed to a single member of the group. The recipient changes each period in a rotating fashion such that all the members of the group are eventually recipients. Participants of a susu do not make a profit, but receive their contributions as a lump sum and is a forms of savings clubs.
Qnet Ltd, formerly known as QuestNet and GoldQuest, is a Hong Kong-based multi-level marketing (MLM) company owned by the QI Group. QNet was founded in 1998 by Vijay Eswaran and Joseph Bismark. The company's products include energy, weight management, nutrition, personal care, home care and fashion accessories on an e-commerce platform.
MMM Global is a Ponzi scheme launched in 2011 by Sergei Mavrodi, with subsidiaries in up to 110 countries. MMM Global is a new avatar of the Russian company MMM, also created by Mavrodi and which operated from 1989 to 2004. The difference between the two is that MMM Global targets developing countries. MMM Global became widely popular in various African countries such as South Africa, Nigeria, Zimbabwe, Kenya and Ghana, with some attributing this popularity to poverty and poor government regulation or law enforcement.
OneCoin is a fraudulent cryptocurrency scheme conducted by offshore companies OneCoin Ltd, based in Bulgaria and registered in Dubai, and OneLife Network Ltd, both founded by Ruja Ignatova in concert with Sebastian Greenwood. OneCoin is considered a Ponzi scheme due to its organisational structure of paying early investors using money obtained from newer ones. It was also a pyramid scheme due to the recruiting of investors without providing any actual product. The company secretly conducted database entry scam simulating transactions not registered by an actual blockchain, and with no mining behind the apparent cryptocurrency release and circulation. Many of those characters central to OneCoin had been previously involved in similar and different other schemes and business malpractices separate from each other. OneCoin was described by The Times as "one of the biggest scams in history".
Elite Activity is the name used for several pyramid schemes typically targeting Christian churches and their congregations. Elite Activity solicited cash gifts of $100 to start, required participants to sign up two other people, required each of those two to sign up two more, and promised payouts of between $800 and $48,000. Marketing materials emphasized that money paid into the scheme was a gift, using language likened to prosperity gospel teachings.
References
- 1 2 Garrand, Danielle (2018-11-13). ""Secret Sister" gift exchange on Facebook returns — and it's a scam". CBS News. Retrieved 2018-11-16.
- ↑ "Beware of this holiday gift exchange scam circulating on Facebook — again". WGN TV. Chicago, Illinois. Tribune Media Wire. 28 November 2016. Retrieved 14 January 2019.
- ↑ Adams, Dwight (14 December 2017). "7 reasons to avoid the 'Secret Sister Gift Exchange' scam". Indy Star. Indianapolis, Indiana: USA Today. Retrieved 14 January 2019.
- ↑ "Don't fall for the 'secret sister' gift exchange scam on Facebook". News.com.au. Australia. 20 November 2018. Retrieved 14 January 2019.
- ↑ "BBB Warning: "Secret Sister" Gift Exchange is Illegal". Better Business Bureau. 2020-11-10. Retrieved 2020-11-10.
- 1 2 "FACT CHECK: Secret Sisters Gift Exchange". Snopes.com. Retrieved 2018-11-16.
- ↑ "Don't fall for the 'secret sister' gift exchange scam on Facebook". TODAY.com. Retrieved 2018-11-16.